In the post-COVID era, Australians are grappling with the burdens associated with the cost of living crisis. Many have been compelled to dramatically adjust their shopping and spending habits to help cope with the ongoing economic pressures of skyrocketing inflation, escalating petrol prices, and surging household expenses.
These are the findings from Circana’s 2023 Shifting Shopper Behaviours Report, which reviews the challenges and opportunities for the FMCG sector as Australian shoppers change their buying habits in response to the cost of living pressures.
Circana's Head of Product and Solutions, APAC, Alistair Leathwood, said: "People are responding to the soaring cost of living as best they can. We are already seeing rapid changes in their behaviour as inflation bites. How shoppers behave will continue to swiftly change as household budgets squeeze tighter and price and value become even more intrinsic to shopping decisions. Loyalty will be tested. Values will be tested too."
“The balance of power has shifted from retailers and manufacturers to the shopper. Knowing the shopper attitudes driving behaviours is key to unlocking loyalty and acquisition,” he added.
Liquor: Price and value for money key drivers of consumer choice
According to Circana, for the first time in three years, Australians now prioritise 'price' as the most critical factor in liquor purchases, with 'better value for money' being twice as important as any other consideration.
Leathwood said the report highlighted a re-balance in alcohol consumption and frequency of purchase between younger and older generations.
"In the past, younger generations (those in their 20s and 30s) typically drank less frequently than their older cohorts. However, over the past year, there has been a notable increase in the frequency and amount of alcohol consumed by younger generations, while alcohol consumption and frequency among older age groups has materially declined.”
“91% of drinking occasions involve more than one drinking – making it an inherently social activity. That means that understanding the context is critical in winning in the market,” said Leathwood.
Investing in the omni-channel experience is key to winning shoppers
Leathwood recommended that businesses invest in providing a seamless and engaging omni-channel experience as shoppers increasingly use different platforms to compare prices and scout around for deals and discounts before purchasing.
He said: "Brands and retailers must put shoppers at the heart of everything they do. This is critical as our research shows that omni-channel shoppers are highly valuable. Fast-tracking smart investment in data technology and shopper solutions will provide a clear 360-degree view on who your shoppers really are and how to satisfy them."
"The whole umbrella experience considers every engagement, thought and feeling your customer has with your brand, including how they engage on your platform. From the search function to the shopping cart, delivering and connecting on every touchpoint is vital."
“Online shoppers are also more loyal to retailers, so winning the omni-channel shopper is critical to capture their tendency to spend more share of wallet with a single retailer,” concluded Leathwood.
Circana is an Associate Member of the Drinks Association.